Shadows of Chinatown: A special report.; Portrait of Man as Mobster Stirs Community's Disbelief

Published: July 11, 1995

(Page 3 of 3)

"When I got the letter," she said, "I thought, 'Damn, we can finally do this.' " She teamed up with Daniel Kumor of the Federal Bureau of Alcohol, Tobacco and Firearms and Bill Oldham of the New York City Police Department's major-case squad.

The gang members described their activities, and the investigators were startled when Mr. Lai's name came up, people familiar with the inquiry said. The surprise deepened when gang members said it was Mr. Lai who had demanded the retaliation that led to the pool hall murder. But the witnesses provided enough detail -- for instance, Mr. Lai's phone numbers and a description of his apartment at the Tsung Tsin building -- to convince prosecutors that they were telling the truth. The walls of the apartment, the witnesses said, were covered with photos of Mr. Lai with Governor Cuomo and other politicians.

A break came when Sonny Mei, the Tung On gang street boss, agreed to plead guilty to five killings and cooperate with investigators. Mr. Mei said he had been at the Triple Eight Palace when Mr. Lai demanded revenge against the Ghost Shadows, according to court records.

In December 1993, a grand jury in Federal District Court in Brooklyn charged Mr. Lai for the first time: the racketeering and conspiracy indictment involved gambling, extortion and the pool hall murder. Also charged were the Tung On leader, Clifford Wong, and eight gang members. When prosecutors examined papers taken from Mr. Lai, they found the phone numbers of Governor Cuomo and other politicians, as well as those of gang members.

Mr. Lai was arrested at home in Albany and jailed. He said his shock deepened to sadness when his son Vincent visited him. Friends said Mr. Lai had envisioned a political career for Vincent, but the arrest put that in jeopardy.

"Daddy hurt you," Mr. Lai recalled telling his eldest son.

"No, Daddy has not hurt me," the son replied. "I'll resign."

Paul Lai and others said his son's resignation was not accepted.

Friends in Chinatown rallied to help Mr. Lai by raising $160,000 for his defense fund. Mr. Greenberg, the Albany District Attorney, agreed to testify as a character witness.

But there was more to come. Unknown to prosecutors in Brooklyn, in mid-1992 the F.B.I. had hidden an electronic transmitter in the Mott Street office of Wing Yeung Chan, the head of the On Leong tong.

When prosecutors finally learned in the summer of 1994 that Mr. Lai had been picked up in 10 to 12 conversations with Mr. Chan, they succeeded in separating Mr. Lai's trial from that of Mr. Wong and the other gang members.

Prosecutors said that on the tapes, Mr. Lai was heard conspiring with Mr. Ong of Hip Sing and with Mr. Chan to divide Chinatown, street by street, into turfs in which each of their gangs could operate with impunity and illegal activities could thrive. Mr. Goldberger countered that the Government had misinterpreted innocent conversations.

In January, Mr. Wong was found guilty of murder in the death of the Stuyvesant student and guilty of other charges, the first tong leader in the United States convicted of such serious crimes. Many of the witnesses against him will also testify against Mr. Lai.

As the Lai investigation continued, prosecutors developed evidence that they said linked him to another slaying and helped explain his path to crime. War on Home Turf New Accusations Of Illegal Activity

Because the Tsung Tsin had no gang, prosecutors said, the tong had once relied on the Sun Yee On triad from Hong Kong to protect its gambling den. But in late 1986, while Mr. Lai was Tsung Tsin president, the triad members threatened to disrupt the gambling unless they were paid more, according to court records. In the Wong trial, a Sun Yee On member testified that he relayed the demand to Mr. Lai, who told him: "Don't get so all worked up. Let us check this out."

According to court records, Mr. Lai sought to get rid of the Sun Yee On by enlisting the aid of Clifford Wong, the leader of the Tung On gang. In exchange, Mr. Lai allegedly promised Mr. Wong a share of future gambling profits and said the Tung On gang could go on the payroll by taking over protection for the operation.

Prosecutors contend that the alliance with Tung On marked a turning point for Mr. Lai. "With his involvement with Clifford Wong and the Tung On, he moved up to a new level of criminal activity," said the lead prosecutor, Leslie R. Caldwell, an assistant United States attorney in Brooklyn. "He got more power and more money."

In February 1987, two Sun Yee On members were lured to a remote area of Brooklyn and shot to death. After the killings, the Tung On gang moved into an apartment vacated by the Sun Yee On at the Tsung Tsin building and took over security for the gambling, according to court records.

Last month, Mr. Lai was indicted a second time. In addition to the pool hall shootings, he was charged with being a leader of the Tung On gang and conspiring in the Sun Yee On slayings. Prosecutors even contended that Mr. Lai had hidden one of the gunmen at his Albany motel.

The new indictment also added broader charges based on the monitored conversations, accusing Mr. Lai of carving up Chinatown with Mr. Chan and Mr. Ong. Mr. Chan faces a separate Federal racketeering and conspiracy indictment, and Mr. Ong died in 1994.

Ms. Caldwell described the indictment as an important step in the battle against Chinese organized crime, but some maintain that the Government has misunderstood both Mr. Lai and Chinatown.

"Paul Lai is a peacemaker," said Richard Chan, a Chinatown businessman. "He tried to say that the gangs should stay in their own places because they are ruining Chinatown by fighting each other. He tried to do something for his community and that's how he got in trouble."

Photos: A gambling den at the Tsung Tsin Association in Chinatown, shown during a 1991 raid, thrived for years before being shut down. The association's president, Paul H. K. Lai is said to have arranged gang protection. (Harvey Wang); Paul H. K. Lai, who is accused of ordering murders to protect illegal rackets, is considered a pillar of the community by many in Chinatown. In 1991, Mr. Lai, far right, was prominent in an unsuccessful City Council bid by Fred Teng, beside him. At left under the banner is former Representative Bill Green. (Linda Rosier/The New York Times) (pg. B2)